Published in Print: April 21, 2010, as Rewards for Students Spawn Mixed Results, Four-City Study Finds

Updated: March 23, 2012

Merit Pay for Students Fails to Raise Scores, Study Finds

Eboni McCallum, a 6th grader at Shaw at Garnet-Patterson Middle School in the District of Columbia, reacts to her $34 from the Capital Gains program, which gives rewards for academics and behavior, on October 17, 2008.—Bill O'Leary/The Washington Post/Getty Images-File

A multicity experiment to test the effect of paying students for performance succeeded in increasing achievement when the payments were tied to specific behaviors related to learning, such as reading books, but not when the awards depended directly on test scores, new findings show.

“Providing incentives for achievement-test scores has no effect on any form of achievement we can measure,” wrote Harvard University economist Roland G. Fryer in a working paper published last week by the National Bureau of Economic Research.

Still, he concluded, if cash rewards are linked to behavior that can contribute to better student outcomes, “incentives can be a cost-effective strategy to raise achievement even among the poorest students in the lowest-performing schools.”

Mr. Fryer, who is the chief executive officer of Harvard’s Education Innovation Laboratory, conducted the experiment during the 2007-08 and 2008-09 school years in more than 250 urban schools in Chicago, Dallas, the District of Columbia, and New York City. In all, roughly 38,000 students collectively received a total of $6.3 million. The experiment was paid for with both public and private funding.

While the experiment shows providing monetary rewards for good practices can boost achievement in a more cost-effective way than other education reforms, such as lowering class size, Mr. Fryer concluded, they are not a cure-all to education’s ills.

“Incentives alone, like these other reforms, are not powerful enough to close the achievement gap,” he says in the working paper.

Brian A. Jacob, a professor of education policy and economics at the University of Michigan in Ann Arbor, said Mr. Fryer’s experiment is especially valuable for educators and policymakers because most studies looking at extrinsic motivation have been done in the context of a psychology lab, not in schools.

“I think what this does is provide a baseline for other researchers and practitioners to experiment with other financial incentives,” Mr. Jacob said. “What I would take away from this if I were a district superintendent or a policymaker is that it is certainly worth continuing to look at this, although I wouldn’t change a statewide policy on the basis of this study alone.”

The experiments were all school-based randomized trials and they varied from city to city in what students were rewarded for, how often, and how much.

New York City 4th and 7th graders were paid based on their performance on a series of 10 interim exams given to all students in district schools. Students could earn as much as $500 over the course of the school year. On average, 4th graders earned $139.43, and 7th graders collected $231.55.

Ninth graders in the Windy City were paid every five weeks based on grades in five core courses. Those students could earn up to nearly $2,000 per year. Chicago students on average earned $695.61, and the highest achiever collected $1,875.

Chicago schools discontinued the program this year because of a lack of funding for a new cohort of students, but will finish making payments to those who were taking part in the program, said spokeswoman Monique D. Bond.

Middle schoolers in the District of Columbia were paid monetary awards based on measures that included attendance and behavior. The maximum amount was based on the size of the school. On average, students earned $532.85 for the year, with the highest-earning student receiving $1,322.

Dallas 2nd graders were paid $2 for every book up to 20 per semester that they read, as long as they also could pass a quiz testing their comprehension on the book. On average, students received $13.81 out of a maximum of $80.

Mr. Fryer declined to comment.

Lost in Translation

There were minimal effects on test scores for the students paid in New York City, and minimal increases in grade point averages for Chicago students. No overall increase in achievement for students in either city was seen.

The Dallas 2nd graders saw statistically significant increases in reading comprehension, vocabulary, and language, posting test-score gains that continued even after the experiment was over. D.C. students saw “moderate gains” in their reading and math scores after middle schoolers were paid for factors including attendance, behavior, turning in homework, and wearing school uniforms.

The Chicago and Dallas results were both surprising, Mr. Jacob said: High school students generally know what it takes to produce better grades in their classes, and yet the money did not seem to motivate the Chicago 9th graders to do better. The relatively limited scope of the reading intervention in Dallas produced significant gains, just by getting students to read more books, Mr. Jacob said.

The study’s mixed results, Mr. Fryer writes, suggest that students lack the know-how to translate excitement about receiving the financial awards into actions that would boost their achievement.

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